Breakout – Definition | Stock Trading Strategy

The big money starts with a breakout, which leads to big stock trends. Trend traders always talk about “trends” whether it be in stocks, commodities, forex, on bonds. You will often hear that XYZ stock is in a trend, or gold is in a huge trend, or the Euro is trending nicely. Unfortunately once a trend has been identified, YOU HAVE MISSED THE TRAIN. The really big trends are often preceded by a breakout into higher prices. So in order to CATCH THE TREND you must know when the trend begins. ALL TRENDS BEGIN WITH A BREAKOUT. I repeat, ALL TRENDS start with a  BREAKOUT. It has been statistically proven that higher prices keep getting higher.

Related Topics

Chart Patterns That Breakout

Breakout Trading System

Stocks That Breakout

Advanced Trading Strategies

Breakout Definition

Breakout – def. When the price action of a stock, crosses a level of support or resistance accompanied by significant higher volume and a rise in volatility. The underlying asset is purchased as the momentum increases and is considered the critical point of entry.

A breakout can be spotted by recognizing various chart patterns, support and resistance levels, and other technical analysis indicators.

The Goal is to Capture the Biggest Trends.

Some Factors to consider.

-You will only trade companies that show GROWTH. Fundamentals do matter in capturing major trends.

-Technical analysis is mandatory to quantify risk.

-Understand which market sectors are leading the bull rally.

Below are some examples of Breakouts and major trends that you missed!!!

Breakouts Lead To Large Stock Trends



These are just some of the examples of the huge trends that have developed in the recent years. The key is to search for stock that are breaking out into new highs. The method is quite simple. With a little study, you can capture some of these major moves.

Trade The Breakout To Catch The Stock Trend

Breakout Trading is about entering at the point of minimal risk, in expectation that a big trend may develop.

This free tutorial will increase your equity curve and give you the wealth you’ve always wanted. If you are new to trading stocks or investing this website is the prefect launching point for your education.

Why 90% of Stock Traders Lose Money

Learning to trade and invest in the stock market can be somewhat overwhelming if you don’t know where to start. Keep in mind that 90%  of those who attempt trading, FAIL.  Why?

-Most Fail to consider Fundamental Analysis as a factor.

-Lack of Understanding of the Stock trading. It’s is too easy to open an brokerage account and start trading.

-Lack of Systematic Strategy.  You need to learn a plan of attack. A system in which you ALWAYS follow.

-Lack of Patience.  Many new traders want to trade now. You must learn when the time to trade is prudent.

Don’t let this happen to you. If you read carefully what is taught here, you will not lose money. Simple as that. Take time to understand what the concepts and strategies on this website, and YOU WILL BE SUCCESSFUL.

 Recommended Articles:

Technical Analysis : The Best Technical Indicators

  A combination of the right indicators is the formula

for success. Indicators to spot breakouts.

 Analyze stock charts and understand stocks.
 Observe breakout price action.

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